The UK FTSE Retailers issued a total of 20 profit warnings in 2024, down from 24 in the previous year, according to EY Parthenon's Profit Warnings report. Despite fewer warnings, the rate remained fairly stable, with 38% of listed retailers affected. A notable rise in warnings occurred in the last quarter, with seven issued compared to just one in Q3. Key factors included weaker consumer confidence, despite positive festive trading reports, which indicated that although disposable incomes increased, spending remained cautious due to uncertainties over cost management and inflation effects on business operations.
Half of all FTSE Retailers' profit warnings in 2024 cited weaker confidence as a leading factor behind the warnings.
Profit warnings in the retail sector remained prevalent in 2024... despite an increase in disposable incomes, consumer confidence has been slow to rebound.
It's clear that shoppers are willing to spend if the price is right and the proposition is strong.
Higher employment costs and the investment needed to adapt to changing consumer behaviour will challenge every retailer during 2025.
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